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Archive for April 25th, 2010

Obama imposed higher tax rates on the so-called rich as part of his government-run healthcare scheme, and he wants to punish success with additional tax rate increases at the end of this year. This excerpt from a New York Post column comments on how many people are getting a free ride from the tax system, but then goes on to explain why a spiteful policy based on class warfare will backfire:

Nearly half of American tax filers didn’t have to pay any federal income tax last year. But Americans — especially New Yorkers — shouldn’t enjoy the free ride. Soon enough, everybody will pay for the higher spending that Washington’s “generosity” encourages. And thanks to Washington, we’ll be paying for higher state and local spending at the same time, too. Just a decade ago, two-thirds of American tax filers still paid into the tax system. …everyone should have to pay something — and anyone who earns enough to have cable TV can pay something toward their own national defense, too. A big majority of people, in fact, should pay enough to be annoyed on April 15 rather than excited. Otherwise, the politicians will figure they can just keep spending without angering a critical mass of voters. …seems certain to let the Bush tax cuts for upper-income Americans expire — so in January the top rate will jump back to 39.6 from 35 percent. Two years later, a new 3.8 percent tax kicks in on investment income earned by families who make $250,000 and up (part of the health-care bill). Thing is, the rich already do pay. And when it comes time to pay for all of the spending we’re doing now, the rich may not be able or willing to pay even more. Taxpayers earning over $200,000 paid more than 54 percent of federal income taxes in 2007, way more than the 32 percent of the nation’s income they earned. …there’s a limit to how much the government can get. Last year, New York hiked income taxes on people who earn more than $200,000. But, as E.J. McMahon of the Empire Center for New York State Policy noted last month, the expected take from that tax hike seems likely to come in half a billion below estimates. There’s good reason to think Obama’s tax hikes on the rich will fall short, too. No, federal taxpayers can’t leave the country as easily as a handful of Bloomberg’s Upper East Side neighbors can leave New York — but they can park more money in tax-free investments or simply decline to earn it in the first place. Such tax-avoidance is perfectly legal — but it means less economic growth, and thus less income earned by everyone else.

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I got some interesting feedback about my pseudo-defense of Obama against the accusation that he is a socialist. It was a faux defense because my goal was simply to point out that Obama is guilty of a different form of statism. For those interested in more information, Jonah Goldberg’s Liberal Fascism book is first rate (and he has a discontinued blog on the topic for those too impatient to wait for a book), and Steve Horowitz does a great job addressing this topic for the Freeman:

Talking the talk of “free markets” but proposing policies that mostly amount to collaborations between well-placed private-sector interests and the State is the hallmark of “corporatism,” or “state capitalism,” or even economic fascism.  From the bailouts of the banking system to “green jobs” to health insurance “reform” to various pieces of the “stimulus,” the real winners from the Obama administration’s policies (and Bush’s before him) have been those in corporate world lucky enough to be in the favored industries and to have sufficient political connections to benefit from the changes. Rather than take over various industries, Obama seems to believe he can work with industry leaders and labor to negotiate and manage them collectively in the national interest.  This is the essence of the “third way” of Italian Fascism.  It is not socialism, as private ownership is nominally maintained, but it is not capitalism, since private owners are not fully allowed to make independent decisions based on perceived profitability.  Those decisions must take a back seat to predetermined  national priorities. Again, consider the health insurance package.  It’s not a single-payer system, which would arguably be more truly socialist.  Instead, we will have a system of nominally private insurance companies heavily regulated and controlled so that they serve political goals, such as trying to guarantee that everyone has insurance regardless of income or medical history.

Keep in mind, though, my point about it being foolish to call Obama a fascist since the term is now inextricably linked to racism and militarism. Far better to point out that he is a statist or a corporatist.

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I suspect this is a marketing gimmick, but this story I saw linked on Marginal Revolution will be a good test of incentives. A hotel is offering meal vouchers for people who “produce at least 10 watt hours of electricity” by riding an exercise bicycle. There is a 99 percent chance that I would cycle for 15 minutes in exchange for free meal, but mostly because I’m cheap rather than susceptible to faux environmentalism (indeed, I’m sometimes tempted to throw towels on the floor because I get nauseated by hotels trying to mask cost-saving strategies in environmentally-sensitive rhetoric).

The Crowne Plaza Hotel in Copenhagen says the idea is to get people fit and reduce their carbon footprint. Guests will have to produce at least 10 watt hours of electricity – roughly 15 minutes of cycling for someone of average fitness. The hotel already produces renewable energy with solar panels on its facade. Guests staying at Plaza Hotel will be given meal vouchers worth $36 (26 euros; £23) once they have produced 10 watt hours of electricity, hotel spokeswoman Frederikke Toemmergaard told the BBC News website. “Many of our visitors are business people who enjoy going to the gym. There might be the odd person who will cycle just to get a free meal, but I don’t think people will exploit the initiative overall,” she added.

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